Avid® (NASDAQ: AVID), a leading technology provider that powers the
media and entertainment industry, today announced its financial
results for the third quarter ended September 30, 2021, raised
full-year 2021 guidance for Subscription & Maintenance Revenue,
raised the high-end and tightened the range for total revenue and
tightened the range towards the high-end of guidance on all other
full-year 2021 metrics.
Total revenue increased 12.4% year-over-year in the third
quarter to $101.6 million, as the Recurring Revenue components of
the Company’s business continued on a strong trajectory.
Subscription revenue was $28.0 million, an increase of 56.4%
year-over-year, reflecting continued growth in paid subscriptions
for creative tools, including an acceleration in Pro Tools net adds
in the third quarter, and strong enterprise subscription sales in
the quarter.
The continued revenue growth resulted in GAAP net income per
share of $0.32 and Non-GAAP Net Income per Share of $0.27, which
was at the higher end of the guidance range provided for the third
quarter. This strong profitability resulted in net cash provided by
operating activities of $16.5 million, and Free Cash Flow of $14.0
million for the quarter.
Third Quarter 2021 Financial and Business
Highlights
- Subscription revenue was $28.0
million, an increase of 56.4% year-over-year.
- Paid Cloud-enabled software
subscriptions increased by 35.0% year-over-year to approximately
389,000 at September 30, 2021 and increased by approximately 19,300
from June 30, 2021.
- Subscription & Maintenance
revenue was $58.7 million, an increase of 20.5%
year-over-year.
- Total revenue was $101.6 million, an
increase of 12.4% year-over-year.
- LTM Recurring Revenue % was 77.1% of
the Company’s revenue for the 12 months ended September 30, 2021,
up from 71.2% for the 12 months ended September 30, 2020.
- Annual Contract Value was $328.0
million as of September 30, 2021, a year-over-year increase of
20.6%, from $271.9 million as of September 30, 2020.
- Gross margin was 64.8%, an increase
of 40 basis points year-over-year. Non-GAAP Gross Margin was 65.3%,
an increase of 40 basis points year-over-year.
- Operating expenses were $56.4
million, an increase of 24.8% year-over-year. Non-GAAP
Operating Expenses were $51.3 million, an increase of 24.1%
year-over-year. The prior year included significant temporary cost
savings initiatives that were put in place due to the COVID-19
pandemic, including a $6.0 million benefit from temporary employee
furloughs in the third quarter of 2020, which affect comparisons to
the prior year period for operating expenses, net income, Adjusted
EBITDA, net cash provided by operating activities and Free Cash
Flow.
- Net income was $14.8 million, an
increase of 85.0% year-over-year. Net income in the
third quarter of 2021 included a one-time $7.9 million benefit from
the forgiveness of the PPP loan and accrued interest.
Non-GAAP Net Income was $12.4 million, an increase of 1.9%
year-over-year. Both net income and Non-GAAP Net Income
in the third quarter of 2020 benefitted from the significant
temporary cost savings discussed above.
- Net income per common share was
$0.32 up from net income per common share of $0.18 in the third
quarter of 2020. Net income per common share in the third quarter
of 2021 included a one-time benefit of $0.17 per common share from
the forgiveness of the PPP loan and accrued interest. Non-GAAP Net
Income per Share was $0.27, unchanged from the third quarter of
2020. Both net income per common share and Non-GAAP Net
Income per Share in the third quarter of 2020 benefitted from the
significant temporary cost savings discussed above.
- Adjusted EBITDA was $17.0 million, a
decrease of 11.9% year-over-year. Adjusted EBITDA Margin was 16.8%,
a year-over-year decrease of 460 basis points. Adjusted EBITDA in
the third quarter of 2020 benefitted from the significant temporary
cost savings discussed above.
- Net cash provided by operating
activities was $16.5 million in the quarter, a decrease of $1.5
million compared to net cash provided by operating activities of
$18.0 million in the prior year period. Free Cash Flow
was $14.0 million in the quarter, a decrease of $1.5 million from
$15.5 million in the prior year period. Both net cash provided by
operating activities and Free Cash Flow in the third quarter of
2020 benefitted from the significant temporary cost savings
discussed above.
- Share repurchases under the $115
million share repurchase authorization announced on September 9,
2021 totaled approximately 412,000 shares for $11.2 million during
the third quarter.
Jeff Rosica, Avid’s Chief Executive Officer and President,
stated, “We are pleased that we were able to significantly grow our
revenue in the third quarter due to the strong performance of our
subscription business and the strengthening recovery of our end
markets, which allowed us to continue to deliver strong
profitability and Free Cash Flow. As we enter the fourth quarter,
which historically has been our strongest quarter, we believe we
are well positioned to finish 2021 on a high note, and our momentum
gives us confidence as we look out to 2022.”
Ken Gayron, Chief Financial Officer and Executive Vice President
of Avid, added, “We continued to grow our LTM Recurring Revenue %,
which reached 77% of our total revenue as of the third quarter, and
we delivered 56.4% year over year growth in subscription revenues.
We also generated robust Free Cash Flow during the third quarter as
a result of solid profitability and working capital management.
Based on the strength in our business, we are raising guidance for
Subscription & Maintenance Revenue for full-year 2021, we are
raising the high-end and tightening the range of our total revenue
guidance and we are tightening the range towards the high-end of
guidance on all other full-year 2021 metrics.” Mr. Gayron
continued, “Additionally, given the high degree of confidence we
have in our plan, we announced a $115 million share repurchase
authorization in September. Under this plan, we repurchased $11.2
million of our shares during the third quarter, and we have
repurchased a total of $20 million of our shares as of November 8.
Share repurchases are an important element of our capital
deployment strategy which we expect will enhance overall
shareholder returns.”
Full Year 2021 Guidance
Avid has revised its full-year 2021 guidance as shown in the
table below.
($ in millions, except per share amounts) |
Prior GuidanceFull-Year 2021 |
New GuidanceFull-Year 2021 |
|
|
|
Revenue |
$382 -
$402 |
$398 –
$404 |
|
|
|
Subscription & Maintenance Revenue |
$217 -
$225 |
$225 –
$230 |
|
|
|
Non-GAAP Net Income per Share |
$1.05 -
$1.27 |
$1.18 –
$1.26 |
|
|
|
Adjusted EBITDA |
$69 -
$79 |
$73 –
$78 |
|
|
|
Free Cash Flow |
$49 -
$57 |
$52 –
$57 |
All guidance presented by the Company is inherently uncertain
and subject to numerous risks and uncertainties. Avid’s actual
future results of operations could differ materially from those
shown in the table above. For a discussion of some of the key
assumptions underlying the guidance, as well as the key risks and
uncertainties associated with these forward-looking statements,
please see “Forward-Looking Statements” below as well as the Avid
Technology Q3 2021 Earnings Call presentation posted on Avid’s
Investor Relations website at ir.Avid.com.
Conference Call to Discuss Third Quarter 2021 Results on
November 9, 2021
Avid will host a conference call to discuss its financial
results for the third quarter on Tuesday, November 9, 2021, at 5:30
p.m. Eastern Time. Participants may join the webcast in listen-only
mode and access the presentation slides using the link on the Avid
Investor Relations website, which can be found on the events tab at
ir.Avid.com. Participants who would like to ask a question can
access the call by dialing +1 929-477-0577 and referencing
confirmation code 9008735. Please connect at least 5 minutes in
advance to ensure a timely connection to the call. A replay of the
webcast will also be available for a limited time on the Avid
Investor Relations website shortly after the completion of the
call.
Non-GAAP Financial Measures and Operational
Metrics
Avid includes non-GAAP financial measures in this press release,
including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow,
Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Net
Income, and Non-GAAP Net Income per Share. The Company also
includes the operational metrics of Cloud-enabled software
subscriptions, Recurring Revenue, LTM Recurring Revenue % and
Annual Contract Value in this release. Avid believes the non-GAAP
financial measures and operational metrics provided in this release
provide helpful information to investors with respect to evaluating
the Company’s performance. Unless noted, all financial and
operating information is reported based on actual exchange rates.
Definitions of the non-GAAP financial measures and the operational
metrics are included in our Form 8-K filed today. Reconciliations
of the non-GAAP financial measures presented in this press release
to the Company's comparable GAAP financial measures for the periods
presented are set forth below and are included in the supplemental
financial and operational data sheet available on our Investor
Relations website at ir.Avid.com, which also includes definitions
of all operational metrics.
This press release also includes expectations for future
Adjusted EBITDA, Non-GAAP Net Income per Share and Free Cash Flow,
which are forward-looking non-GAAP financial measures.
Reconciliations of these forward-looking non-GAAP measures are not
included in this press release or elsewhere, due to the high
variability and difficulty in making accurate forecasts and
projections of some of the information excluded from the estimation
of the non-GAAP results, together with some of the excluded
information not being ascertainable or accessible at this time. As
a result, we are unable to quantify certain amounts that would be
required to be included in the most directly comparable GAAP
financial measure without unreasonable efforts.
Forward-Looking Statements
Certain information provided in this press release includes
forward-looking statements within the meaning of the Securities Act
of 1933 and the Securities Exchange Act of 1934, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Examples of forward-looking
statements include statements regarding our future financial
performance or position, results of operations, business strategy,
plans and objectives of management for future operations, and other
statements that are not historical fact. You can identify
forward-looking statements by their use of forward-looking words
such as “may”, “will”, “anticipate”, “expect”, “believe”,
“estimate”, “intend”, “plan”, “should”, “seek”, or other comparable
terms.
Readers of this press release should understand that these
forward-looking statements are not guarantees of performance or
results. Forward-looking statements provide our current
expectations and beliefs concerning future events and are subject
to risks, uncertainties, and factors relating to our business and
operations, all of which are difficult to predict and could cause
our actual results to differ materially from the expectations
expressed in or implied by such forward-looking statements.
These risks, uncertainties, and factors include, but are not
limited to: risks related to the impact of the coronavirus
(COVID-19) outbreak and its variants on our business, suppliers,
consumers, customers and employees; our liquidity; our ability to
execute our strategic plan including our cost saving strategies,
and to meet customer needs; our ability to retain and hire key
personnel; our ability to produce innovative products in response
to changing market demand, particularly in the media industry; our
ability to successfully accomplish our product development plans;
competitive factors; history of losses; fluctuations in our revenue
based on, among other things, our performance and risks in
particular geographies or markets; our higher indebtedness and
ability to service it and meet the obligations thereunder;
restrictions in our credit facilities; our move to a subscription
model and related effect on our revenues and ability to predict
future revenues; fluctuations in subscription and maintenance
renewal rates; elongated sales cycles; fluctuations in foreign
currency exchange rates; seasonal factors; adverse changes in
economic conditions; variances in our Revenue Backlog and the
realization thereof; risks related to the availability and prices
of raw materials, including any negative effects caused by
inflation, weather conditions, or health pandemics; disruptions or
inefficiencies in our supply chain and/or operations, including
from the COVID-19 outbreak; the costs, disruption, and diversion of
management's attention due to the COVID-19 outbreak; the
possibility of legal proceedings adverse to our Company; and other
risks described in our reports filed from time to time with the
U.S. Securities and Exchange Commission. Moreover, the business may
be adversely affected by future legislative, regulatory or other
changes, including tax law changes, as well as other economic,
business and/or competitive factors. The risks included above are
not exhaustive. We caution readers not to place undue reliance on
any forward-looking statements included in this press release which
speak only as to the date of this press release. We undertake no
responsibility to update or revise any forward-looking statements,
except as required by law.
About Avid
Avid delivers the most open and efficient media platform,
connecting content creation with collaboration, asset protection,
distribution, and consumption. Avid’s preeminent customer community
uses Avid’s comprehensive tools and workflow solutions to create,
distribute and monetize the most watched, loved and listened to
media in the world—from prestigious and award-winning feature films
to popular television shows, news programs and televised sporting
events, and celebrated music recordings and live concerts. With the
most flexible deployment and pricing options, Avid’s
industry-leading solutions include Media Composer®, Pro Tools®,
Avid NEXIS®, MediaCentral®, iNEWS®, AirSpeed®, Sibelius®, Avid
VENUE™, FastServe®™ and Maestro™. For more information about Avid
solutions and services, visit www.Avid.com, connect with Avid on
Facebook, Instagram, Twitter, YouTube, LinkedIn, or subscribe to
Avid Blogs.
© 2021 Avid Technology, Inc. All rights reserved. Avid, the Avid
logo, Avid NEXIS, FastServe, AirSpeed, iNews, Maestro,
MediaCentral, Media Composer, Pro Tools, Avid VENUE, and Sibelius
are trademarks or registered trademarks of Avid Technology, Inc. or
its subsidiaries in the United States and/or other countries. All
other trademarks are the property of their respective owners.
Product features, specifications, system requirements and
availability are subject to change without notice.
Contacts
Investor contact: |
PR contact: |
Whit Rappole |
Jim Sheehan |
Avid |
Avid |
ir@Avid.com |
jim.sheehan@Avid.com |
AVID
TECHNOLOGY, INC. |
|
|
|
|
|
|
|
Condensed Consolidated Statements of
Operations |
|
|
|
|
|
|
|
(unaudited -
in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net
revenues: |
|
|
|
|
|
|
|
Products |
$ |
36,850 |
|
|
$ |
35,775 |
|
|
$ |
107,295 |
|
|
$ |
98,121 |
|
Services |
|
64,790 |
|
|
|
54,656 |
|
|
|
183,585 |
|
|
|
158,044 |
|
Total net revenues |
|
101,640 |
|
|
|
90,431 |
|
|
|
290,880 |
|
|
|
256,165 |
|
|
|
|
|
|
|
|
|
Cost of
revenues: |
|
|
|
|
|
|
|
Products |
|
20,468 |
|
|
|
20,957 |
|
|
|
60,044 |
|
|
|
58,873 |
|
Services |
|
15,269 |
|
|
|
11,217 |
|
|
|
43,379 |
|
|
|
34,322 |
|
Total cost of revenues |
|
35,737 |
|
|
|
32,174 |
|
|
|
103,423 |
|
|
|
93,195 |
|
Gross
profit |
|
65,903 |
|
|
|
58,257 |
|
|
|
187,457 |
|
|
|
162,970 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and development |
|
17,129 |
|
|
|
13,623 |
|
|
|
48,639 |
|
|
|
42,116 |
|
Marketing and selling |
|
24,413 |
|
|
|
19,998 |
|
|
|
66,511 |
|
|
|
64,977 |
|
General and administrative |
|
14,901 |
|
|
|
10,796 |
|
|
|
42,214 |
|
|
|
34,144 |
|
Restructuring costs, net |
|
(88 |
) |
|
|
723 |
|
|
|
1,001 |
|
|
|
1,008 |
|
Total operating expenses |
|
56,355 |
|
|
|
45,140 |
|
|
|
158,365 |
|
|
|
142,245 |
|
|
|
|
|
|
|
|
|
Operating
income |
|
9,548 |
|
|
|
13,117 |
|
|
|
29,092 |
|
|
|
20,725 |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
(1,646 |
) |
|
|
(4,566 |
) |
|
|
(5,547 |
) |
|
|
(15,437 |
) |
Other
income, net |
|
7,864 |
|
|
|
143 |
|
|
|
4,459 |
|
|
|
233 |
|
Income
before income taxes |
|
15,766 |
|
|
|
8,694 |
|
|
|
28,004 |
|
|
|
5,521 |
|
Provision
for income taxes |
|
991 |
|
|
|
707 |
|
|
|
1,832 |
|
|
|
1,546 |
|
Net
income |
$ |
14,775 |
|
|
$ |
7,987 |
|
|
$ |
26,172 |
|
|
$ |
3,975 |
|
|
|
|
|
|
|
|
|
Net income
per common share - basic |
$ |
0.32 |
|
|
$ |
0.18 |
|
|
$ |
0.58 |
|
|
$ |
0.09 |
|
Net income
per common share - diluted |
$ |
0.32 |
|
|
$ |
0.18 |
|
|
$ |
0.56 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic |
|
45,564 |
|
|
|
44,019 |
|
|
|
45,115 |
|
|
|
43,665 |
|
Weighted-average common shares outstanding - diluted |
|
46,428 |
|
|
|
44,758 |
|
|
|
46,449 |
|
|
|
44,498 |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY, INC. |
|
|
|
|
|
|
|
Reconciliations of GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
|
|
(unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
GAAP Revenue |
|
|
|
|
|
|
|
|
GAAP
Revenue |
$ |
101,640 |
|
|
$ |
90,431 |
|
|
$ |
290,880 |
|
|
$ |
256,165 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
|
GAAP Gross
Profit |
|
65,903 |
|
|
|
58,257 |
|
|
|
187,457 |
|
|
|
162,970 |
|
|
Stock-based compensation |
|
444 |
|
|
|
433 |
|
|
|
1,362 |
|
|
|
908 |
|
|
Non-GAAP
Gross Profit |
$ |
66,347 |
|
|
$ |
58,690 |
|
|
$ |
188,819 |
|
|
$ |
163,878 |
|
|
GAAP Gross
Margin |
|
64.8 |
% |
|
|
64.4 |
% |
|
|
64.4 |
% |
|
|
63.6 |
% |
|
Non-GAAP
Gross Margin |
|
65.3 |
% |
|
|
64.9 |
% |
|
|
64.9 |
% |
|
|
64.0 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Expenses |
|
|
|
|
|
|
|
|
GAAP
Operating Expenses |
|
56,355 |
|
|
|
45,140 |
|
|
|
158,365 |
|
|
|
142,245 |
|
|
Less Amortization of intangible assets |
|
(105 |
) |
|
|
(105 |
) |
|
|
(315 |
) |
|
|
(306 |
) |
|
Less Stock-based compensation |
|
(3,337 |
) |
|
|
(2,865 |
) |
|
|
(9,473 |
) |
|
|
(7,224 |
) |
|
Less Restructuring costs, net |
|
88 |
|
|
|
(723 |
) |
|
|
(1,001 |
) |
|
|
(1,008 |
) |
|
Less Acquisition, integration and other costs |
|
(876 |
) |
|
|
- |
|
|
|
(2,083 |
) |
|
|
183 |
|
|
Less Efficiency program costs |
|
- |
|
|
|
(79 |
) |
|
|
(48 |
) |
|
|
(445 |
) |
|
Less Digital Transformation costs |
|
(808 |
) |
|
|
|
|
(808 |
) |
|
|
- |
|
|
Less COVID-19 related expenses |
|
|
|
(3 |
) |
|
|
(22 |
) |
|
|
(251 |
) |
|
Non-GAAP
Operating Expenses |
$ |
51,317 |
|
|
$ |
41,365 |
|
|
$ |
144,615 |
|
|
$ |
133,194 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income and Adjusted EBITDA |
|
|
|
|
|
|
|
|
GAAP net
income |
|
14,775 |
|
|
|
7,987 |
|
|
|
26,172 |
|
|
|
3,975 |
|
|
Interest and other expense |
|
(6,218 |
) |
|
|
4,423 |
|
|
|
1,088 |
|
|
|
15,204 |
|
|
Provision for income taxes |
|
991 |
|
|
|
707 |
|
|
|
1,832 |
|
|
|
1,546 |
|
|
GAAP
Operating Income |
|
9,548 |
|
|
|
13,117 |
|
|
|
29,092 |
|
|
|
20,725 |
|
|
Amortization of intangible assets |
|
105 |
|
|
|
105 |
|
|
|
315 |
|
|
|
306 |
|
|
Stock-based compensation |
|
3,781 |
|
|
|
3,297 |
|
|
|
10,835 |
|
|
|
8,132 |
|
|
Restructuring costs, net |
|
(88 |
) |
|
|
723 |
|
|
|
1,001 |
|
|
|
1,008 |
|
|
Acquisition, integration and other costs |
|
876 |
|
|
|
- |
|
|
|
2,083 |
|
|
|
(183 |
) |
|
Efficiency program costs |
|
- |
|
|
|
79 |
|
|
|
48 |
|
|
|
445 |
|
|
Digital Transformation costs |
|
808 |
|
|
|
|
|
808 |
|
|
|
- |
|
|
COVID-19 related expenses |
|
- |
|
|
|
3 |
|
|
|
22 |
|
|
|
251 |
|
|
Non-GAAP
Operating Income |
$ |
15,030 |
|
|
$ |
17,324 |
|
|
$ |
44,204 |
|
|
$ |
30,684 |
|
|
Depreciation |
|
2,002 |
|
|
|
2,004 |
|
|
|
6,323 |
|
|
|
6,317 |
|
|
Adjusted
EBITDA |
$ |
17,032 |
|
|
$ |
19,328 |
|
|
$ |
50,527 |
|
|
$ |
37,001 |
|
|
GAAP net
income margin |
|
14.5 |
% |
|
|
8.8 |
% |
|
|
9.0 |
% |
|
|
1.6 |
% |
|
Adjusted
EBITDA Margin |
|
16.8 |
% |
|
|
21.4 |
% |
|
|
17.4 |
% |
|
|
14.4 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
|
GAAP net
income |
|
14,775 |
|
|
|
7,987 |
|
|
|
26,172 |
|
|
|
3,975 |
|
|
Amortization of intangible assets |
|
105 |
|
|
|
105 |
|
|
|
315 |
|
|
|
306 |
|
|
Stock-based compensation |
|
3,781 |
|
|
|
3,297 |
|
|
|
10,835 |
|
|
|
8,132 |
|
|
Restructuring costs, net |
|
(88 |
) |
|
|
723 |
|
|
|
1,001 |
|
|
|
1,008 |
|
|
Acquisition, integration and other costs |
|
876 |
|
|
|
- |
|
|
|
2,083 |
|
|
|
(183 |
) |
|
Efficiency program costs |
|
- |
|
|
|
79 |
|
|
|
48 |
|
|
|
445 |
|
|
Digital Transformation costs |
|
808 |
|
|
|
|
|
808 |
|
|
|
- |
|
|
Gain on forgiveness of PPP Loan |
|
(7,800 |
) |
|
|
|
|
(7,800 |
) |
|
|
- |
|
|
COVID-19 related expenses |
|
- |
|
|
|
3 |
|
|
|
22 |
|
|
|
251 |
|
|
Loss on Extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
3,748 |
|
|
|
- |
|
|
Tax impact of non-GAAP adjustments |
|
(25 |
) |
|
|
5 |
|
|
|
(184 |
) |
|
|
(35 |
) |
|
Non-GAAP Net
Income |
$ |
12,432 |
|
|
$ |
12,199 |
|
|
$ |
37,048 |
|
|
$ |
13,899 |
|
|
Weighted-average share count (Basic) |
|
45,564 |
|
|
|
44,019 |
|
|
|
45,115 |
|
|
|
43,665 |
|
|
Weighted-average share count (Diluted) |
|
46,428 |
|
|
|
44,758 |
|
|
|
46,449 |
|
|
|
44,498 |
|
|
Non-GAAP
Earnings per Share (Basic) |
$ |
0.27 |
|
|
$ |
0.28 |
|
|
$ |
0.82 |
|
|
$ |
0.32 |
|
|
Non-GAAP
Earnings per Share (Diluted) |
$ |
0.27 |
|
|
$ |
0.27 |
|
|
$ |
0.80 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
|
16,521 |
|
|
|
17,955 |
|
|
|
35,418 |
|
|
|
8,843 |
|
|
Capital expenditures |
|
(2,475 |
) |
|
|
(2,407 |
) |
|
|
(4,750 |
) |
|
|
(5,619 |
) |
|
Free Cash
Flow |
$ |
14,046 |
|
|
$ |
15,548 |
|
|
$ |
30,668 |
|
|
$ |
3,224 |
|
|
Free Cash
Flow conversion from Adjusted EBITDA |
|
82.5 |
% |
|
|
80.4 |
% |
|
|
60.7 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY, INC. |
|
|
|
|
Condensed Consolidated Balance Sheets |
|
|
|
|
(unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
Assets |
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and
Cash Equivalents |
|
$ |
50,485 |
|
|
$ |
79,899 |
|
|
Restricted
Cash |
|
|
1,422 |
|
|
|
1,422 |
|
|
Accounts receivable, net of allowances of $1,422
and $1,478 |
|
|
|
at September 30, 2021 and
December 31, 2020, respectively |
|
|
58,125 |
|
|
|
78,614 |
|
|
Inventories |
|
|
22,215 |
|
|
|
26,568 |
|
|
Prepaid
Expenses |
|
|
6,766 |
|
|
|
6,044 |
|
|
Contract
Assets |
|
|
22,612 |
|
|
|
18,579 |
|
|
Other
Current Assets |
|
|
2,335 |
|
|
|
2,366 |
|
Total Current Assets |
|
|
163,960 |
|
|
|
213,492 |
|
|
|
|
|
|
|
|
Property and
Equipment, Net |
|
|
15,211 |
|
|
|
16,814 |
|
|
Goodwill |
|
|
32,643 |
|
|
|
32,643 |
|
|
Right of Use
Assets |
|
|
25,202 |
|
|
|
29,430 |
|
|
Deferred Tax
Assets, Net |
|
|
5,413 |
|
|
|
6,801 |
|
|
Other
Long-Term Assets |
|
|
6,462 |
|
|
|
5,958 |
|
Total Assets |
|
$ |
248,891 |
|
|
$ |
305,138 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Deficit |
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts
Payable |
|
$ |
22,413 |
|
|
$ |
21,823 |
|
|
Accrued
Compensation and Benefits |
|
|
26,320 |
|
|
|
29,105 |
|
|
Accrued
Expenses and Other Current Liabilities |
|
|
34,511 |
|
|
|
42,264 |
|
|
Income Taxes
Payable |
|
|
1,447 |
|
|
|
1,664 |
|
|
Short-Term
Debt |
|
|
9,159 |
|
|
|
4,941 |
|
|
Deferred
Revenues |
|
|
76,658 |
|
|
|
87,974 |
|
Total Current Liabilities |
|
|
170,508 |
|
|
|
187,771 |
|
|
|
|
|
|
|
|
Long-Term
Debt |
|
|
162,990 |
|
|
|
202,759 |
|
|
Long-Term
Deferred Revenues |
|
|
10,109 |
|
|
|
11,284 |
|
|
Long-Term
Lease Liabilities |
|
|
24,466 |
|
|
|
28,462 |
|
|
Other
Long-Term Liabilities |
|
|
7,249 |
|
|
|
7,786 |
|
Total Liabilities |
|
|
375,322 |
|
|
|
438,062 |
|
|
|
|
|
|
|
Stockholders' Deficit |
|
|
|
|
|
Common
Stock |
|
|
454 |
|
|
|
442 |
|
|
Treasury
Stock |
|
|
(11,169 |
) |
|
|
- |
|
|
APIC |
|
|
1,030,116 |
|
|
|
1,036,658 |
|
|
Accumulated
Deficit |
|
|
(1,142,175 |
) |
|
|
(1,168,347 |
) |
|
Accumulated
Other Comprehensive Loss |
|
|
(3,657 |
) |
|
|
(1,677 |
) |
Total Stockholders' Deficit |
|
|
(126,431 |
) |
|
|
(132,924 |
) |
|
|
|
|
|
|
Total Liabilities and Stockholders' Deficit |
|
$ |
248,891 |
|
|
$ |
305,138 |
|
|
|
|
|
|
|
AVID TECHNOLOGY, INC. |
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
(unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ |
26,172 |
|
|
$ |
3,975 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
6,323 |
|
|
|
6,317 |
|
|
|
Provision for doubtful accounts |
|
401 |
|
|
|
1,349 |
|
|
|
Stock-based compensation expense |
|
10,216 |
|
|
|
8,132 |
|
|
|
Non-cash provision for restructuring |
|
841 |
|
|
|
653 |
|
|
|
Non-cash interest expense |
|
386 |
|
|
|
3,408 |
|
|
|
Loss on extinguishment of debt |
|
2,579 |
|
|
|
- |
|
|
|
Gain on extinguishment of PPP loan |
|
(7,800 |
) |
|
|
- |
|
|
|
Unrealized foreign currency transaction (gains) loss |
|
(1,400 |
) |
|
|
219 |
|
|
|
Benefit from (provision for) deferred taxes |
|
1,388 |
|
|
|
997 |
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts
receivable |
|
20,089 |
|
|
|
12,741 |
|
|
|
|
Inventories |
|
4,353 |
|
|
|
788 |
|
|
|
|
Prepaid
expenses and other assets |
|
(1,343 |
) |
|
|
1,390 |
|
|
|
|
Accounts
payable |
|
590 |
|
|
|
(26,440 |
) |
|
|
|
Accrued
expenses, compensation and benefits and other liabilities |
|
(10,635 |
) |
|
|
7,752 |
|
|
|
|
Income taxes
payable |
|
(217 |
) |
|
|
81 |
|
|
|
|
Deferred
revenue and contract assets |
|
(16,525 |
) |
|
|
(12,519 |
) |
Net cash provided by operating activities |
|
35,418 |
|
|
|
8,843 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property and equipment |
|
(4,750 |
) |
|
|
(5,619 |
) |
Net cash used in investing activities |
|
(4,750 |
) |
|
|
(5,619 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from revolving line of credit |
|
- |
|
|
|
22,000 |
|
|
Repayment from revolving line of credit |
|
- |
|
|
|
(22,000 |
) |
|
Proceeds from long-term debt |
|
180,000 |
|
|
|
7,800 |
|
|
Repayment of debt |
|
(208,142 |
) |
|
|
(1,474 |
) |
|
Payments for repurchase of common stock |
|
(10,526 |
) |
|
|
- |
|
|
Payments for repurchase of outstanding Notes |
|
- |
|
|
|
(28,867 |
) |
|
Proceeds from the issuance of common stock under employee stock
plans |
|
363 |
|
|
|
252 |
|
|
Common stock repurchases for tax withholdings for net settlement of
equity awards |
|
(17,108 |
) |
|
|
(2,610 |
) |
|
Prepayment penalty on extinguishment of debt |
|
(1,169 |
) |
|
|
- |
|
|
Partial unwind capped call cash receipt |
|
- |
|
|
|
875 |
|
|
Payments for credit facility issuance costs |
|
(2,574 |
) |
|
|
(289 |
) |
Net cash used in by financing activities |
|
(59,156 |
) |
|
|
(24,313 |
) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
(927 |
) |
|
|
1,394 |
|
Net decrease in cash, cash equivalents, and restricted cash |
|
(29,415 |
) |
|
|
(19,695 |
) |
Cash, cash equivalents and restricted cash at beginning of the
period |
|
83,638 |
|
|
$ |
72,575 |
|
Cash, cash equivalents and restricted cash at end of the
period |
$ |
54,223 |
|
|
$ |
52,880 |
|
Supplemental information: |
|
|
|
Cash and cash equivalents |
$ |
50,485 |
|
|
|
49,142 |
|
Restricted cash |
|
1,422 |
|
|
|
1,664 |
|
Restricted cash included in other long-term assets |
|
2,316 |
|
|
|
2,074 |
|
Total cash, cash equivalents and restricted cash shown in the
statement of cash flows |
$ |
54,223 |
|
|
$ |
52,880 |
|
|
|
|
|
|
|
|
AVID
TECHNOLOGY, INC. |
|
Supplemental Revenue Information |
|
|
|
(unaudited -
in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sep 30, |
|
Jun 30, |
|
Sep 30, |
|
|
|
|
|
2021 |
|
2021 |
|
2020 |
|
|
|
|
|
Revenue Backlog* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
Revenue |
$ 86.8 |
|
$ 91.6 |
|
$ 81.2 |
|
|
|
|
Other
Backlog |
315.0 |
|
309.4 |
|
321.7 |
|
|
|
|
Total
Revenue Backlog |
$ 401.8 |
|
$ 401.0 |
|
$ 402.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The expected timing of recognition of revenue backlog as of
September 30, 2021 is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
2022 |
|
2023 |
|
Thereafter |
|
Total |
|
|
|
|
|
|
|
|
|
|
Deferred Revenue |
$ 32.2 |
|
$ 46.4 |
|
$ 4.1 |
|
$ 4.1 |
|
$ 86.8 |
Other Backlog |
35.7 |
|
120.5 |
|
75.7 |
|
83.1 |
|
$ 315.0 |
Total Revenue Backlog |
$ 67.9 |
|
$ 166.9 |
|
$ 79.8 |
|
$ 87.2 |
|
$ 401.8 |
|
|
|
|
|
|
|
|
|
|
*A definition of
Revenue Backlog is included in our Form 10-K and the supplemental
financial and operational data sheet available on our investor
relations webpage at ir.avid.com. |
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